Lenders look at your income, existing EMIs, credit score and the property itself. RBI limits how much of the value a lender can finance, so you need to arrange a down payment of roughly 10% to 25% depending on loan size, plus the costs on top of the price.
What lenders check
Most banks and housing finance companies look at age, stable income, existing loans, a credit score (750 and above is generally preferred) and the legal and technical status of the property.
Loan size and down payment
RBI's loan-to-value rules at the time of writing allow up to 90% financing for loans up to ₹30 lakh, up to 80% for loans from ₹30 lakh to ₹75 lakh, and up to 75% above ₹75 lakh. Stamp duty, registration and other costs are usually not financed, so keep cash aside for them.
How EMI works
EMI depends on the loan amount, interest rate and tenure. As an illustration only, a ₹50 lakh loan at 8.5% a year over 20 years has an EMI of about ₹43,400. Rates change, so ask each lender for the current rate and the processing fees.
A longer tenure lowers the EMI but increases the total interest you pay. Many borrowers choose a longer tenure and prepay when they can.
Mistakes to avoid
Do not stretch the EMI so far that one unexpected expense becomes a crisis. Do not forget insurance, maintenance and moving costs. Compare at least three lenders, and for a floating-rate loan to an individual, lenders cannot charge you a penalty for prepayment.
Questions people ask
Can I get a loan for an under-construction flat?
Do you provide the loan?
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